State’s jobless rate stuck near record

Tens of thousands give up on looking

California’s unemployment rate remained at a near-record 12.4 percent in December as tens of thousands of workers dropped out of the labor force, unable to find full-time jobs.

The jobless rate was unchanged between November and December even as employers shed 38,800 workers from their payrolls, according to data released yesterday by the California Employment Development Department.

In San Diego County, the unemployment rate fell from a revised 10.6 percent to 10.1 percent, related in part to seasonal retail hiring. Even with that holiday boost, however, the county lost 1,600 jobs.

The jobless rate grew in 43 states last month, a sharp contrast from November, when the unemployment declined in 34 states. Only Michigan, Nevada, Rhode Island and South Carolina had worse rates than California.

Economists say one reason California’s rate remained steady, instead of going up, is that many of the jobless have become so discouraged about finding full-time work that they either are working part-time or have stopped looking for work altogether — going back to school, entering job-training programs or biding their time until the economy improves.

“I think there are an awful lot of people doing that, particularly in households where they’re not the primary breadwinners,” said Alan Nevin, director of economic research at MarketPointe Realty Advisors in San Diego.

Beacon Economics, a research firm in Los Angeles, estimates that over the past three months, 106,000 Californians have dropped out of the full-time labor force and are not being counted among the unemployed. If they were, it said, the number of Californians unable to find full-time work would almost certainly be above 20 percent.

Last fall, when California unemployment averaged 10.4 percent statewide, the total including the disaffected and part-time workers came to 19.6 percent, according to the latest data from the U.S. Bureau of Labor Statistics.

Only Michigan, with a 20.4 percent rate, and Oregon, with 20.1 percent, had higher percentages.

“What’s really sick is we’re almost the same rate as Michigan,” Nevin said. “With Michigan, it was because they were so tied to manufacturing. With us it’s been because of our ties to home building. The home building industry has laid off tens of thousands of workers, and we have no clue of what they’re doing, although a lot of them are probably making some money as day workers.”

Michael Berwick, a former director of the Employment Development Department who now covers employment issues for Santa Monica’s Milken Institute, said the December employment reports “clearly give reason for concern. They don’t mean we’re falling back into recession, but they give pause to the hopes that have been raised over the past couple months, when the numbers gave hope that we might have turned the corner.”

The job losses cut across most employment categories and throughout most regions of the state. A Beacon Economics analysis found that Santa Cruz, Redding, Bakersfield and El Centro were the only areas in the state that added jobs in December — a combined total of only 2,000 new jobs.

“The indication is that the recovery and job growth in coming months are going to be S-L-O-W,” the report concluded.

In San Diego County, job losses hit a variety of industries last month. Hotels, restaurants and other leisure companies cut 1,400 jobs; factories, 500; professional and business services, 400; and financial activities, 100.

Local first-time unemployment claims jumped from 35,007 in November to 52,459 in December. Despite recent extensions to the unemployment insurance program, 18,616 San Diegans exhausted their benefits last month, up from 15,035 in November.

“Usually in December, the total number for employment is positive because of hiring for the holidays. But this year it’s negative,” said Kelly Cunningham, economist at the National University System’s Institute for Policy Research. “The best thing that could be said is that if you add the October and November numbers to December, we did add jobs for the quarter, so maybe we could be bottoming out.”

But Cunningham added that during a typical year, the unemployment rate rises by 1 percentage point from December to June. If that pattern holds true, he said, the jobless rate could top 11 percent before softening in summer.

Berwick said the job situation is so bad that some of the state’s 50 government-backed job-training centers have been unable to spend the stimulus money they’ve received because they don’t want to train workers for nonexistent jobs.

“There’s even weakness in health care, which is one area that is usually recession-proof,” Berwick said. “What I’m hearing is that people who are coming out of nurse’s training courses are having a hard time finding jobs, partly because retired nurses are re-entering the work force for economic reasons.”

Mark Cafferty, who heads San Diego Workforce Partnership, said he hasn’t been struggling to find uses for the federal stimulus dollars that have come to his job-training center. In the past year, the partnership has trained 2,800 people, either in its career center or in programs it offers through community colleges or university extension.

“People are doing the right thing and trying to gain credentials, but I’ve never seen a time like this where we’ve had such a thin base of job openings available for people once they’re out of the programs,” Cafferty said. “Using our contacts across the community, we’re able to find some job openings but it’s usually one or two at a time, instead of having some big company coming to us with a list of job openings, which used to happen.”